17 - Legal & Regulation Updates - India

https://innovatorsrace50.com/team/compliance-watcher.html#.WJxAx8FH6A4.gmail SEBI: Review of Financial close out and Auction framework for corporate bonds traded on the stock exchanges platform

SEBI has issued a Circular dated February 10, 2017 which is in furtherance of the previous circulars dated January 24, 2013, and September 12, 2013, pertaining to guidelines for debt segment as well as corporate bonds listed on the stock exchange for trading, clearing and settlement of debt securities. Accordingly, the following changes are introduced through partial modification of the previous circulars:

SEBI Board Meeting

The SEBI Board met in New Delhi on February 11, 2017 and took following decisions: SEBI Budget for Financial Year 2017-2018:

RBI: Draft Directions: Reserve Bank Commercial Paper Directions, 2017

RBI has published draft of the Reserve Bank Commercial Paper Directions, 2017. The objectives of the proposed directions are as follows: Enable Banks to regulate the credit and financial systems

The Specified Bank Notes (Cessation Of Liabilities) Bill, 2017

The Lok Sabha passed the Specified Bank Notes (Cessation of Liabilities) Bill, 2017. The pertinent features of the bill are as follows: The Bill makes the holding, transferring or receiving demonetised Rs 500 and Rs 1,000 ( ‘Specified Bank Notes’) currency notes a criminal offence and ends the liability of the Reserve Bank of India with respect to the Specified Notes.

IBBI Draft (Voluntary Liquidation) Regulations, 2017

The IBBI has through notification dated February 14, 2017, published draft Regulations for voluntary liquidation. The draft regulations have been divided into the following Chapters containing details as follows:

CBDT: Income Tax (2nd Amendment) Rules, 2017

Rule 114(1) and Rule 114A(1) of the Income Tax Rules enumerate the procedure for making an application for allotment of PAN (“Permanent Account Number”) and Tax Deduction and Collection Account Number respectively. Provisos have been incorporated in Rule 114(1) and Rule 114A(1) which provide that an application for allotment of PAN and Tax Deduction and Collection Account Number can also be made through a common application form notified by the Central Government in the Official Gazette.

Food Safety and Standards (Approval for Non-Specified Food and Food Ingredients) Regulations, 2017

Proposed Changes: The term Approval has now been defined in Regulation 2(b) as permission to manufacture, distribute, sell or import any article of food or food ingredients, intended directly or indirectly for human consumption that has not been permitted under any other regulation made under the Act.

The Payment of Wages (Amendment) Bill, 2017

Section 6 of The Payment of Wages Act, 1936 will be replaced. As per the amendment the payment of wages will be required to be paid in coins or currency notes existing and valid in law or by cheque or by crediting the wages in the bank account of the employee.

PIB- Rationalization of Labour Laws

Through its report in 2002, the Second National Commission on Labour had recommended that the existing Labour laws in the country were required to be broadly grouped into four or five Labour Codes on functional basis. The Ministry of Labour and Employment has taken steps for drafting four Labour Codes with respect to Wages, Industrial Relations, Social Security & Welfare and Safety and Working Conditions. This has been done by simplifying, amalgamating and rationalizing the relevant provisions of the existing Central Labour Laws.

PIB-Expansion of EPF Ambit

The Ministry of Labour and Employment has launched the Employees Enrolment Campaign for the period between 01.01.2017 to 31.03.2017 to bring in more employees from public and private sector into the ambit of Employees Provident Fund Organization (EPFO).

Insecticides (Amendment) Rules, 2017

The key changes are: Insecticides imported through rail- In the previous rule the insecticides were imported in India only at i.Ferozepore Cantonment and Amritsar railway stations across the frontier with West Pakistan, ii. Ranaghat, Bongaon and Mahiassan railway stations across the frontier with the East Pakistan. As per the new amendment the insecticides are to be imported through rail at (i) Ferozepore Cantonment and Amritsar railway stations across the frontier with Pakistan, (ii) Ranaghat, Bongaon and Mahiassan railway stations the frontier with Bangladesh.

NPPA- Revised guidelines for representation- display of draft version of proposed price Calculation sheets for proposed revised/notified ceiling price/retail price on NPPA''s website

National Pharmaceutical Pricing Authority- Revised guidelines for representation and display of draft version of proposed price Calculation sheets for proposed revised/notified ceiling price/retail price on NPPA''s website. Central Motor Vehicles (Second Amendment) rules, 2017 Employer has to now ensure that the motor vehicles under the category M1 and M2 are fitted with anti-lock braking system on or after 1st April 2018 in case of new models and on or after 1st April 2019 in case of all models.

IRDAI: Exposure Draft on IRDAI (Appointed Actuary) Regulations, 2017

IRDAI has issued exposure draft of IRDAI (Appointed Actuary) Regulations, 2017. The exposure draft seeks to amend IRDA (Appointed Actuary), Regulations, 2000. The key changes introduced are related to appointment of actuary and their duties and functions. Further, comments and suggestions on the draft are invited before 28/2/2017.

IRDAI: Exposure Draft IRDAI (Relaxations under Appointed Actuary Regulations 2017 and appointment of Mentors) Guidelines, 2017

IRDAI has issued exposure draft IRDAI (Relaxations under Appointed Actuary Regulations 2017 and appointment of Mentors) Guidelines, 2017. The exposure draft seeks to amend the guidelines dated March 22, 2016 issued with respect to Appointment of Appointed Actuaries and their Mentors.

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16 - Legal & Regulation Updates - India

SEBI Procedures for Exchange Listing Control Mechanism

SEBI via Circular dated January 27, 2017 has issued additional compliances with respect to Regulation 45 of the SECC Regulations. This Circular is issued to avoid any conflict arising out of Regulation 45 for listing of a stock exchange (“SE”) on any recognised stock exchange, other than itself. 

Companies (Incorporation) Amendment Rules, 2017 - Certificate of Incorporation & Form INC-32 revised

MCA vide its Notification dated January 25, 2017 has revised E-Form No.INC-11 (Certificate of Incorporation) which shall now mention the Permanent Account Number (“PAN”) of the Company issued by the Income-tax Department. 

NCLT allows a Petition under Section 7 of the Insolvency and Bankruptcy Code

NCLT through its Order dated January 16, 2017 has allowed the Company Petition filed by the Applicant, pursuant to Section 7 of the Insolvency and Bankruptcy Code 2016 (“IB Code”), pertaining to initiation of corporate insolvency resolution process by financial creditor for realizing the outstanding debt and also for seeking an Order of Moratorium. 

Income Tax Department launches Operation Clean Money

The Income Tax Department has initiated Operation Clean Money. Initial phase of the operation involves e-verification of large cash deposits made during 9th November to 30th December 2016. This operation is initiated to identify cash transactions which do not appear to be in line with the tax payer’s profile. 

CBDT: Clarifications on implementation of General Anti Avoidance Rule

The provisions of General Anti Avoidance Rule (GAAR) are anti-avoidance rules contained in Chapter X-A of the Income Tax Act, 1961. GAAR empowers revenue authorities in a country to deny the tax benefits of certain transactions/arrangements, which do not have any commercial substance or consideration other than achieving the tax benefit. 

Service Tax Exemption for services rendered by Business Correspondents to Banking Companies for its Rural Branch Accounts

Exemption is provided with respect to service tax on services rendered by business correspondents or business facilitators to banking companies for its rural branch accounts. 

IRDAI: Distribution of other Financial Products by Insurance Firms

Insurance Marketing Firms registered under IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015 are allowed to distribute financial products and undertake activities regulated by other financial regulators. However, IRDAI vide a circular has placed a pre requisite in relation to the same. IMF (Insurance Marketing Firm) can distribute financial products only subject to the fulfilment of the applicable regulatory framework of that financial regulator. 

Food Safety and Standards (Contaminants, toxins and Residues) First Amendment Regulations, 2017

As per the amendment a new regulation is inserted relating to ‘other Contaminants’ such as Histamine in Fish and Fishery Products contaminants, toxins and Residues. The fish species with potential to cause histamine fish poisoning is listed. The histamine level specified when exceeds in one or more samples the same will be rejected. However the limits of histamine level in fish and fishery products are specified in the amendment. 

Drugs (Prices Control) Order, 2013

The Ministry of Chemicals and fertilizers, National Pharmaceutical Pricing Authority, through a Order dated January 24, 2017 has issued the Order to fix the ceiling price exclusive of local tax applicable, if any of the scheduled formulations of drugs. 

PIB- Information & Broadcasting Secretary Launches Film Condition Assessment Project to enable creation of global facilities of film preservation in India

Information & Broadcasting Secretary Launches Film Condition Assessment Project to enable creation of global facilities of film preservation in India. 

Pre Legislation Alert: Draft- Guidelines on Pre-processing and Co-processing of Hazardous and other Wastes in Cement Plants as per H&OM (M& TBM), Rules, 2016

CPCB has drafted the Guidelines for co-processing of different kind of Hazardous and other wastes in Cement kiln. However the wastes have been permitted by CPCB and then authorized by SPCBs to implement regular co-processing in various Cement kiln under Rule 9 of Hazardous and Other Wastes (Management and Trans-boundary Movement) Rules, 2016. Rule 9 specifies the Utilization of Hazardous and other wastes. However CPCB has revised the Guidelines to facilitate SPCBs/PCCs to grant authorization for utilization of different kinds of waste, including Hazardous & other wastes through co-processing in cement kilns. 

The Apprenticeship (Amendment) Rules, 2017

The sub-rule( 4) of Rule 14 has been substituted. The compliance of counter- signing of work dairy was mentioned in Rule 14(4). As per the new amendment the same has been specified in Rule 14(2). 

SEBI - Consultation paper for Consolidation and re-issuance of debt securities issued under the SEBI (Issue and Listing of Debt Securities)

SEBI has issued a Consultation Paper dated February 02, 2017 for Consolidation and re-issuance of debt securities issued under the SEBI, ILDS Regulations, 2008 with an objective to seek public comments on some of the key proposals. 

SEBI - Integrated reporting by top 500 listed Entities

SEBI had earlier mandated submission of Business Responsibility Report (“BRR”). The key principles which are required to be reported pertain to areas such as environment, governance, stakeholder’s relationships etc. 

IBBI: Insolvency and Bankruptcy Board of India (Procedure for Governing Board Meetings) Regulations, 2017 ("Regulations")

IBBI has enacted these Provisions via Notification dated January 30, 2017. Some of the key highlights of these Regulations are as follows 

Draft: IRDAI: Protection of Policyholders'' Interests Regulations, 2017.

The basic framework for protection of policyholders’ interests is contained in the IRDA (Protection of Policyholders’ Interests) Regulations, 2002. However, the consumer protection and grievance redressal related provisions are contained in various other regulations and need to be aligned with Regulations meant for policyholders protection. Taking into consideration the above, IRDAI has proposed IRDAI (Policy Holders’ Regulation, 2017 for strengthening the measures taken for policyholders protection. The basic objective of the changes proposed in the draft are 

Draft- The Delhi Factories (Amendment) Rules, 2017

In Rule 5: The validity of license in Form 4 was valid for a period of one year or five years. However as per the amendment the license is also valid for 10 years. 

The Medical Devices Rules, 2017

The Rules are applicable where Substances are used for vitro diagnosis and surgical dressings, surgical bandages, surgical staples, surgical sutures, ligatures, blood and blood component collection bag with or without anticoagulant which are covered under all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes. 

Drugs and Cosmetics (4th Amendment) Rules, 2017

Rule 91: The previous rule mentions the license was to be renewed after its expiry of 1 year from the date of issue for periods of one year at a time. As per the new amendment the expiry period of “one year from the date of issue” is substituted with “three years from the date of issue”. 

Drugs and Cosmetics ( 3rd Amendment) Rules, 2017

In the amendment the class of drugs mentioned in Schedule K serial numbers 35, 36, 37 and the extent and conditions of exemption are substituted: 

EPFO- Circular on responsibility of Principal Employer for deposit of PF of contracted employee

Changes introduced: As large number of employees are hired by the principal employer on Contract basis for the business activities. However in many cases, the contract employees are not being provided Social Security benefits under EPF & MP Act, 1952. 

EPFO- Grant of exemption from EDLI Scheme, 1976 under section 17(2A) of the EPS and MP Act, 1952

The Commissioners are requested to conduct review in respect of each establishments and to submit the proposal which are due for exemption/further extension and also fresh proposals for grant of exemption if any. The provisions and benefits under EDLI scheme, 1976 are under examination. The relaxation is not given to any establishment under Para 28(7) of the EDLI Scheme 1976. The Proposals received for examination shall be examined for exemption and needs to be forwarded to Head Office for approval. 

ESIC- Stepping up monitoring of registration of employers/employees under SPREE programme

ESIC- Stepping up monitoring of registration of employers/employees under SPREE programme. ESIC has launched a special registration programme of employers and employees under ESI Act in the name of SPREE w. e. f. 20.12.2016 to 31.03.2017. The waiver of default action against employers under SPREE and the recent enhancement of wage ceiling from Rs. 15,000/- to Rs. 21,000/- are expected to impetus registration under the Act. 

Review of the Schedule of hazardous occupations and processes under Child and Adolescent Labour (Prohibition & Regulation) Act, 1986

The Technical Advisory Committee had advised to review the existing Schedule and has submitted its report recommending the schedule in two parts on Hazardous occupations and process of the Act. However the TAC submitted its report in Part A covering the list of hazardous occupations and processes in which adolescents are prohibited to work and children are prohibited to help and in Part B covering a list of occupations and process where children are prohibited to help in family or family enterprises. 

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